TRW & Co · Funds & Financial Services
Consumer Credit Lawyers in London
Consumer credit lawyers London lenders, brokers and fintechs instruct advise on FCA permissions, compliant agreements, affordability, collections and redress. In 2026 the Consumer Credit Act is being reformed, buy-now-pay-later has entered regulation and motor finance redress schemes are under way, so product design and historic risk both need attention now.
Key pointCCA reform will strip out many technical information sanctions, but the Treasury is leaving sections 56, 75 and 140A untouched for now, so the unfair relationship test remains the main source of large-scale consumer credit liability.
At a glance
Two-layer regime
The Consumer Credit Act 1974 defines regulated agreements and key rights; FSMA and the FCA's CONC sourcebook and Consumer Duty govern day-to-day conduct.
CCA reform announced
HM Treasury's 18 May 2026 policy statement moves most information requirements into FCA rules and repeals linked sanctions once replacement rules commence.
BNPL regulated
Deferred payment credit became regulated on 15 July 2026, bringing creditworthiness checks, the Consumer Duty and Ombudsman access to most BNPL products.
Motor finance redress
FCA PS26/3, published 30 March 2026, created two section 404 redress schemes for motor finance agreements made between 2007 and 2024.
Unfair relationships remain
Sections 140A to 140C let courts reopen unfair credit relationships, as the Supreme Court did in Johnson v FirstRand in August 2025.
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What consumer credit law covers in England and Wales
Consumer credit lawyers London lenders, brokers and fintechs instruct deal with any business that lends to individuals, arranges that lending, collects consumer debts or supplies goods on finance. That includes banks and building societies, motor and retail finance houses, buy-now-pay-later providers, credit card issuers, guarantor and high-cost lenders, debt collectors, credit reference agencies and the platforms that connect them.
The legal question usually arises earlier than people expect. A retailer that adds an instalment option at checkout, a software company that embeds lending in its app, or a dealer that introduces customers to a finance house may each be carrying on a regulated activity. So may a business lending to sole traders and small partnerships, which are treated as individuals for these purposes.
Consumer credit is also one of the most litigated corners of financial services. Agreements are scrutinised years after they were signed, by customers, claims management companies, the Financial Ombudsman Service and the courts. A documentation or disclosure error made at scale can turn into a book-wide redress exercise, which is why the work of consumer credit lawyers London firms rely on is as much about risk as it is about permissions.
The legal and regulatory framework
Consumer credit in the UK rests on two layers that operate together. Understanding which layer governs a given obligation is the starting point for every compliance review and every dispute.
The Consumer Credit Act 1974
The Consumer Credit Act 1974 (CCA) still defines what a regulated credit agreement is and contains many of the rights and sanctions that matter in practice. It distinguishes fixed-sum and running-account credit, restricted-use and unrestricted-use credit, and debtor-creditor-supplier agreements from debtor-creditor agreements. Those labels decide which protections apply.
Three provisions dominate disputes. Section 75 makes a lender jointly liable with a supplier for misrepresentation and breach of contract in qualifying debtor-creditor-supplier transactions. Section 56 treats negotiations by a dealer or broker as conducted on the lender's behalf. And sections 140A to 140C allow a court to reopen an agreement where the relationship between lender and borrower is unfair, with wide powers to order repayment or alter terms.
The CCA also contains detailed information requirements: pre-contract disclosure, the form and content of agreements, annual and arrears statements, and default and enforcement notices. Historically, breach of those requirements carried severe civil sanctions, including unenforceability without a court order and loss of interest for periods of non-compliance.
FSMA and the FCA rulebook
Since April 2014, consumer credit has been regulated by the Financial Conduct Authority under the Financial Services and Markets Act 2000 (FSMA). Lending, credit broking, debt adjusting and counselling, debt collecting and administration, and credit information and reference services are regulated activities. Carrying them on without permission is a criminal offence, and credit agreements made in breach of the general prohibition can be unenforceable against the customer.
Day-to-day conduct is governed by the FCA's Consumer Credit sourcebook (CONC), which covers financial promotions, creditworthiness assessment, arrears and forbearance, debt collection and high-cost credit. Over the top sits the Consumer Duty, which requires firms to deliver good outcomes for retail customers on products and services, price and value, consumer understanding and consumer support.
Scotland and Northern Ireland
The CCA and FSMA apply across the UK, so the core regime is the same in Scotland and Northern Ireland. Enforcement procedure is not: court processes, diligence in Scotland and limitation rules differ, and some CCA provisions refer specifically to Scottish procedure. Lenders with UK-wide books should not assume an English collections process can be used unchanged north of the border.
What is changing in 2026: reform, BNPL and motor finance
Three developments shape the advice consumer credit lawyers London clients need this year. Each changes either who is regulated, what the rules say, or the cost of getting historic business wrong.
Reform of the Consumer Credit Act
On 18 May 2026 HM Treasury published its policy statement on CCA reform. Most information requirements will be repealed and recast as FCA rules, and the sanctions attached to them, including unenforceability and disentitlement to interest, will go when those requirements are repealed. The criminal offences in the Act are being retained.
Crucially, the Treasury is not changing sections 56, 75, 75A or 140A to 140C at this stage. The changes are being taken forward in the Financial Services and Markets Bill introduced in 2026, with repeal commencing only once replacement FCA rules are in place. Our guide to Consumer Credit Act reform tracks the detail.
Buy-now-pay-later is now regulated
Deferred payment credit, the FCA's term for most interest-free BNPL products, became regulated on 15 July 2026 under an amending order made in July 2025. The FCA's final rules in PS26/1 apply its creditworthiness rules, the Consumer Duty and Financial Ombudsman jurisdiction to these products. Firms that notified the FCA could continue under a temporary permissions regime while their applications are determined; others cannot enter new agreements. See our note on BNPL regulation.
Motor finance commission and the redress schemes
In Hopcraft v Close Brothers; Johnson v FirstRand Bank [2025] UKSC 33, the Supreme Court rejected fiduciary and bribery-based claims against motor finance lenders but upheld Mr Johnson's unfair relationship claim under section 140A, given the size of the undisclosed commission and an undisclosed commercial tie. On 30 March 2026 the FCA published final rules in PS26/3 for two industry-wide redress schemes under section 404 FSMA, covering agreements from 2007 to 2024. Our motor finance redress article explains the mechanics.
The unfair relationship test survives every reform currently proposed. It is the provision that turns yesterday's commission model into today's redress bill.
Key decisions for lenders, brokers and platforms
Most consumer credit mandates turn on a small number of structural choices. Each one has regulatory, commercial and litigation consequences, and they are hard to unpick once a book has been written.
| Model | Who holds the permission | Main advantage | Main risk |
|---|---|---|---|
| Direct lender | The lender, with FCA permission to enter into regulated credit agreements | Control of product, pricing and customer data | Full CONC, Consumer Duty and section 140A exposure; capital and funding needed |
| Credit broker or introducer | The broker, with credit broking permission | Lighter capital needs; panel of lenders | Commission disclosure, section 56 attribution and panel conflicts |
| Appointed representative | The principal firm, which takes regulatory responsibility | Faster route to market | Dependence on the principal; tighter oversight expected under planned reforms |
| Embedded or white-label lending | A partner lender; the brand acts as broker or AR | Credit offered without becoming a lender | Allocation of Consumer Duty outcomes, complaints and redress in the contract |
| Exempt or unregulated credit | None, if an exemption genuinely applies | No authorisation cost | Exemptions are narrow; getting it wrong risks criminal liability and unenforceable agreements |
The choice also affects valuation. Funders and acquirers want to know who owns the customer, who carries the redress exposure and whether historic agreements were properly executed. A clean permissions map is one of the first things a lender's due diligence will test, and our FCA authorisation team often works alongside the consumer credit analysis.
Pricing, commission and fair value
Under the Consumer Duty, price and value must be justified by reference to the benefits customers receive, not simply benchmarked against competitors. Broker commission is the most sensitive element after the motor finance litigation. Discretionary commission linked to the interest rate was banned for motor finance by the FCA from January 2021, but the principles the Supreme Court applied under section 140A are not limited to cars.
How a consumer credit mandate typically runs
Whether the starting point is a new product, a regulatory concern or a portfolio acquisition, the work tends to follow a similar sequence. The steps below assume a firm launching or reviewing a consumer lending product.
- Perimeter analysis. Identify every regulated activity in the customer journey, including broking, debt administration and collections, and test whether any exemption genuinely applies.
- Permissions and governance. Confirm the right FCA permissions, senior manager responsibilities and, where relevant, appointed representative or partnership arrangements.
- Product design and fair value. Document target market, distribution strategy and a fair value assessment that would stand up to FCA scrutiny under the Consumer Duty.
- Documentation build. Draft pre-contract information, credit agreements, statements and arrears letters, mapping each to current CCA requirements and CONC.
- Creditworthiness and affordability. Settle a proportionate creditworthiness model, evidence sources and override controls, and record the rationale.
- Financial promotions and journeys. Review advertising, app screens and broker scripts, including commission disclosure.
- Arrears, forbearance and collections. Build compliant default and enforcement processes, vulnerable customer handling and Breathing Space procedures.
- Monitoring and remediation. Set outcome testing and complaint root-cause analysis, and fix errors promptly rather than letting them accumulate across the book.
Documents and evidence to assemble
Consumer credit disputes are won on paper. Regulators, the Ombudsman and courts expect a lender to evidence what the customer was told, when and why the lending decision was made. The following records are the ones most often requested.
- Signed or electronically executed credit agreements, with version control showing which template applied on each date.
- Pre-contract information and adequate explanations given to the customer, including how and when they were provided.
- Creditworthiness and affordability data, the decision rules applied and any manual overrides.
- Broker agreements, commission structures and the disclosure customers actually saw.
- Statements, arrears notices, default notices and enforcement correspondence, with proof of service.
- Complaint files, final response letters and any Financial Ombudsman decisions on similar issues.
- Product governance and fair value assessments, board minutes and Consumer Duty reports.
For historic books, gaps in the record are themselves a risk. Under the motor finance schemes, for example, missing evidence can lead to a presumption that disclosure was inadequate. Firms should locate and preserve archives before a claim or regulatory request arrives.
When CCA reform commences, the repeal of information requirements is not expected to wipe out exposure on existing agreements automatically. Transitional provisions will matter, and sections 75 and 140A remain untouched for now. Keep historic documentation and remediation logs, and do not treat reform as an amnesty.
Risks and common mistakes
The same problems recur across lenders of every size. Each of the following has generated regulatory action, Ombudsman complaints or litigation.
Assuming an exemption applies without testing it
Businesses often rely on exemptions for short-term interest-free credit, business lending or high-net-worth borrowers without checking the conditions. The exemptions are drafted narrowly and depend on details such as the number of repayments, the duration of the credit, the purpose of the loan and whether the required declarations were signed in the prescribed form. BNPL providers relied on one such exemption until 15 July 2026. If an exemption fails, the firm may have been carrying on a regulated activity without permission, which is a criminal offence and can leave agreements unenforceable. A written analysis, refreshed whenever the product changes, is the minimum.
Treating commission disclosure as a formality
The Supreme Court's decision in Johnson shows that undisclosed or poorly disclosed commission, especially where it is large relative to the cost of credit or accompanied by a commercial tie, can make a relationship unfair under section 140A. Generic wording buried in terms and conditions may not be enough. Lenders and brokers in any sector that pays introducer commission should review what customers were actually shown, whether the amount or basis was explained, and whether any exclusivity or first-refusal arrangements were disclosed. The remedy for unfairness can include repayment of commission and interest, so the exposure scales with the book.
Weak creditworthiness evidence
CONC requires a reasonable creditworthiness assessment proportionate to the credit and the customer. Many irresponsible lending complaints succeed not because the decision was wrong but because the lender cannot show what it checked. Automated decisioning must be documented, with records of the data sources, thresholds and any manual intervention. Firms should also be able to show how they considered signs of financial difficulty, gambling transactions or repeat borrowing. The Financial Ombudsman applies its own view of what was fair and reasonable, so lenders should align their evidence with how complaints are actually decided.
Defective notices in arrears and enforcement
Default notices, arrears notices and termination steps must follow the CCA and CONC closely. Errors in content, timing or service can stop a lender from enforcing, add interest disentitlement for the period of non-compliance and fuel claims management activity. Collections teams sometimes adapt templates locally or migrate systems without legal review, and the errors then spread across thousands of accounts. Before enforcement or a debt sale, the lender should test a sample of files for compliance and correct systemic issues before buyers or courts find them.
Under-allocating Consumer Duty responsibility in partnerships
Embedded finance and white-label arrangements involve several firms in one customer journey. The Consumer Duty expects each to take responsibility for outcomes within its control, but contracts often say little about who monitors outcomes, handles complaints, funds remediation or answers FCA requests. When something goes wrong the parties then argue about allocation while the regulator expects action. Partnership agreements should allocate outcome monitoring, data sharing, complaint handling and remediation costs expressly, with audit rights and exit plans.
Disputes, complaints and redress
Consumer credit disputes run on three tracks. Complaints go first to the firm, then to the Financial Ombudsman Service, which can make awards up to £455,000 for complaints about acts or omissions on or after 1 April 2019 under limits that took effect on 1 April 2026. Court claims, often brought in volume, rely on section 75, section 140A and alleged CCA breaches. And the FCA can require past business reviews or impose redress schemes under section 404 FSMA, as it has done for motor finance.
The Financial Services and Markets Bill also proposes changes to how the Ombudsman applies its fair and reasonable test where firms have complied with FCA rules, and gives the FCA tools for mass redress events. Those reforms may change complaint strategy in future, but they do not alter the courts' jurisdiction under section 140A.
For lenders facing litigation, early decisions matter, and consumer credit lawyers London lenders bring in at the first sign of a claims cluster can shape them: whether to contest a lead case, how to manage limitation arguments, whether to settle in volume, and how to respond to claims management companies. Our banking and financial disputes team handles the contentious side, and our FCA enforcement lawyers advise where supervisory concerns escalate.
Cross-border consumer lending
Consumer credit regulation is territorial. A lender based in Dhaka, Dubai, Singapore or the EU that lends to UK residents, or markets credit to them, is likely to need UK permissions or a regulated UK partner. UK financial promotion rules can apply to overseas websites and apps that target UK consumers, so geo-blocking and marketing controls should be built in from the outset.
The reverse also applies. UK lenders serving diaspora communities, including British Bangladeshi customers sending money or financing purchases in Bangladesh, must check whether local licensing, foreign exchange controls or consumer protection rules apply in the destination country. Bangladesh Bank rules on foreign exchange and lending, for example, can affect product design for cross-border credit linked to remittances or property.
Overseas groups often ask consumer credit lawyers London-based to map the UK perimeter before committing capital. Groups funding UK lending from abroad should also consider tax, transfer pricing and the governing law of funding and servicing agreements. TRW & Co works with its Dhaka office and with local counsel elsewhere, and our financial services regulation practice coordinates the UK analysis.
How TRW & Co's consumer credit lawyers London clients instruct can help
We act for lenders, brokers, fintech platforms, investors and borrowers' advisers. Our consumer credit lawyers London team combines regulatory, transactional and disputes experience so that the same advisers who design a product can defend it.
Perimeter and permissions
Written perimeter analyses, exemption reviews and FCA applications or variations. We help firms decide between direct authorisation, appointed representative status and partnership models.
Documentation and journeys
Credit agreements, pre-contract information, statements, arrears and default letters, and digital journeys reviewed against the CCA and CONC, with an eye on the reform timetable.
Consumer Duty and fair value
Fair value assessments, outcome monitoring frameworks, board reports and partnership agreements that allocate Duty responsibilities clearly between firms.
Commission and redress reviews
Commission model reviews, section 140A risk assessments, past business reviews and implementation of redress scheme requirements, including evidence and attestation support.
Disputes and complaints
Defence of section 75 and unfair relationship claims, Ombudsman strategy and volume litigation management. Where advocacy in the higher courts is required, we instruct specialist counsel.
Transactions and funding
Regulatory due diligence on loan book acquisitions, forward flow and debt sale agreements, and funding structures for lending platforms.
To see how this work fits with our wider financial services and disputes practice, visit our practices, or contact us to discuss a specific product or claim.
Checklist for decision-makers
Boards, compliance leads and investors can use these questions to test readiness. Any "no" is a reason to involve consumer credit lawyers London regulators would expect a firm of your profile to consult.
- Do we have a current written perimeter analysis for every credit product, broking arrangement and collections activity?
- Do our FCA permissions match what we actually do, including any BNPL or deferred payment credit offered since 15 July 2026?
- Can we evidence fair value and good outcomes under the Consumer Duty with real data, not just policies?
- Have we reviewed commission arrangements and disclosure in light of Johnson and section 140A?
- Are historic agreements, notices and creditworthiness records retained and retrievable?
- Do partnership and broker contracts allocate complaints, data, monitoring and redress costs?
- Have we mapped the Treasury's CCA reform to our documents, systems and transition plan?
- Do we know our exposure to Ombudsman complaints and volume litigation, and who decides settlement strategy?
Reform will eventually simplify parts of the regime, but it will not remove the need for careful product design or protect firms from the unfair relationship test. The firms that fare best are those that treat consumer credit lawyers London-based or otherwise as part of product design rather than as a last resort when complaints arrive.
Frequently asked questions
01Do I need FCA permission to offer credit to customers?
If you lend to individuals, sole traders or small partnerships, or introduce them to lenders, you are probably carrying on a regulated activity under FSMA unless an exemption applies. Exemptions are narrow and depend on details such as the number of repayments, the term, the purpose of the credit and signed declarations. Operating without permission is a criminal offence and can make agreements unenforceable against the customer. A written perimeter analysis before launch, and each time the product changes, is the safest approach.
02What does Consumer Credit Act reform mean for my existing agreements?
HM Treasury's May 2026 policy statement says most information requirements will move into FCA rules and the linked sanctions, such as unenforceability and loss of interest, will be repealed when those requirements go. Repeal will only commence once the FCA has made replacement rules, and transitional provisions will apply. Sections 56, 75, 75A and 140A to 140C are not being changed at this stage, so existing exposure under those provisions continues. Keep records and remediation logs for historic agreements.
03Is buy-now-pay-later regulated in the UK?
Yes. Deferred payment credit, which covers most interest-free BNPL arrangements offered through third-party lenders, became a regulated activity on 15 July 2026. Lenders must hold FCA permission or operate within the temporary permissions regime, carry out proportionate creditworthiness assessments, meet the Consumer Duty and give customers access to the Financial Ombudsman Service. Retailers offering BNPL should check whether their own role amounts to credit broking and whether their lender partner is properly authorised.
04What did the Supreme Court decide about motor finance commission?
In Hopcraft, Johnson and Wrench [2025] UKSC 33, decided on 1 August 2025, the Supreme Court held that car dealers acting as credit brokers did not owe fiduciary duties to customers, so the bribery and fiduciary claims failed. However, it upheld Mr Johnson's claim that his relationship with the lender was unfair under section 140A, because the commission was very large relative to the cost of credit and a commercial tie was not disclosed. That reasoning can apply to commission in other credit markets.
05How do the motor finance redress schemes work?
The FCA's PS26/3 sets up two schemes under section 404 FSMA: one for agreements up to 31 March 2014 and one from 1 April 2014 to 2024. Lenders must assess whether a discretionary commission arrangement, high commission or a contractual tie was inadequately disclosed, apply presumptions and rebuttals set by the FCA, and calculate redress using prescribed methods. Customers can refer disputes about how the scheme was applied to the Financial Ombudsman. Implementation requires strong governance and senior manager attestations.
06What is an unfair relationship claim?
Under sections 140A to 140C of the Consumer Credit Act, a court can find that the relationship between a lender and borrower is unfair because of the agreement's terms, the way the lender exercised its rights, or anything done before or after the agreement was made. Once a borrower alleges unfairness, the lender must prove the relationship was fair. Remedies are wide and include repayment, reducing sums owed or altering terms. Undisclosed commission, irresponsible lending and unfair charges are common grounds.
07Can the Financial Ombudsman award more than a court?
The Ombudsman decides what is fair and reasonable, which can take account of FCA rules, good practice and the Consumer Duty, not only strict legal liability. Its binding award limit for complaints about acts or omissions on or after 1 April 2019 is £455,000 under limits applying from 1 April 2026. Customers can accept or reject a final decision; if they accept, it binds the firm. The Financial Services and Markets Bill proposes adjusting the fair and reasonable test where firms have complied with FCA rules.
Sources and official materials
- Consumer Credit Act 1974 — Regulated agreements, section 75 and sections 140A to 140C
- Financial Services and Markets Act 2000 — General prohibition and section 404 redress schemes
- FCA Handbook: Consumer Credit sourcebook (CONC) — Conduct rules for consumer credit firms
- FCA: Consumer Duty — Outcome-based rules for retail financial services
- FCA PS26/1: Regulation of Deferred Payment Credit — Final rules for buy-now-pay-later
- FCA PS26/3: Motor Finance Consumer Redress Scheme — Final rules for the motor finance redress schemes
- Hopcraft v Close Brothers; Johnson v FirstRand Bank [2025] UKSC 33 — Supreme Court judgment on motor finance commission
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.